Efficiency Measurement of Australian Dairy Farms: National and Regional Performance

In this paper we use Data Envelopment Analysis (DEA) to estimate technical efficiency for a sample of 1742 Australian dairy farms. Bearing in mind data limitations we find that average technical efficiency is 59 per cent, but there are significant regional differences. These results reflect differences in State level milk marketing arrangements in place before dairy deregulation in July 2000 providing an ex post explanation for the changing composition of dairy farms in Australia. We also examine two important technical aspects of DEA implementation. First, how changes in model input specification alter the relative performance of farms. Second, we employ a simple bootstrap procedure to show how changes in sample size affects estimates of technical efficiency. These results have simple but important implications for the use of DEA as an industry-benchmarking tool.

Malcolm, Bill
Wright, Vic
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Publication Type:
Journal Article
DOI and Other Identifiers:
ISSN 1442-6951 (Other)
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Published in:
Australasian Agribusiness Review, 13
JEL Codes:
ISSN 1442-6951
Series Statement:
Volume 13
Paper 7

 Record created 2017-04-01, last modified 2020-10-28

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